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No. of Recommendations: 12
The point has to be that if Berkshire is deploying cash that would otherwise sit idle (capital
appreciation rate: zero) to buy back shares (capital appreciation rate: ~10% p.a) then a 10% buyback
increases the appreciation rate of outstanding shares by ... 10%.
...
So on a book value basis OK no significant change but if you value BRK shares on a future earnings basis, the value is up 10%.


This is a straw man.
You can't value solely on an earnings basis. The cash is worth face value.
If you had a public company owning nothing but $100m in cash, it's worth $100m, not zero.
(perhaps a pinch less if the management team is particularly astute, perhaps a bit less if they're known to be dolts likely to blow it--but not zero)

It's certainly true that the earnings per continuing share would rise 10%, but you can't leap from there to the notion that a share is thus worth 10% more.

From a purely practical point of view, the "spare" cash won't sit idle forever in this universe.
Any valuation idea making that assumption won't give you the right answer.

The best way to think of the cash on the books right now is a mix of
(a) just the short end of the usual fixed income portfolio they always have, and
(b) a SPAC run by Warren Buffett.

Jim
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